Venture capitalists bet on Sublime, a startup bringing AI to email security

Published

6 months ago

December 12, 2024

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Across the world, companies rely on Microsoft and Google to administer email accounts for employees. Keeping all those mailboxes secure, however, is a business opportunity.

Proofpoint went public in 2012, and as enterprises migrated to the cloud, many adopted the company’s secure email gateway software as a precautionary measure. But private equity firm Thoma Bravo bought Proofpoint in 2021, and another provider, Mimecast, went private in 2022.

Then generative artificial intelligence took off. The trending technology gave more ammunition to hackers, as well as new tools for security companies that promise to defend clients against attacks.

Now, a new set of companies are gaining traction in a mature market.

Investors valued startup Material Security at $1.1 billion in a 2022 funding round. In August, Abnormal Security, which calls itself “AI-native,” said it was worth $5.1 billion after a funding round involving CrowdStrike and Wellington Management. And on Thursday, Sublime Security, co-founded by U.S. Defense Department cybersecurity veteran Josh Kamdjou, said it had raised a round totaling $60 million.

Kamdjou, who is also Sublime’s CEO, had spent his former career showing companies how he could break into their networks and avoid being stymied by email security products. Then he decided to work on a solution.

“I decided to build something that would stop me as an attacker,” he said.

Business credit card issuer Brex had been using Material with Google inboxes, but after testing out Sublime, Brex switched, the startup’s chief information security officer, Mark Hillick, told CNBC in an interview. There were many problem emails that Material allowed but Sublime did not, Hillick said.

“All they need is one person to click on it, and then they go from there,” he said, referring to hackers. “That’s why false negatives are pretty dangerous.”

Abnormal Security is considerably larger than Material and Sublime, with over $200 million in annualized revenue. It’s quickly gaining market share, according to Peter Firstbrook, vice president and distinguished analyst at industry researcher Gartner.

Some companies use Abnormal Security as an add-on to Mimecast or Proofpoint, he said. For years, businesses have called in Proofpoint to filter messages before sending them along to Microsoft-based inboxes, he said, adding that Proofpoint’s year-over-year revenue growth rate is now in the teens after being in the thirties as recently as 2018.

Brex briefly looked at Abnormal but decided not to implement it, Hillick said.

“I don’t believe in black box as a philosophy,” he said. “It reduces visibility, so I can’t see how Brex is going to be attacked. I can’t see what tactics or techniques are being used. With Sublime, I can do that.”

Hillick said that in his experience, Sublime provides better coverage of new threats. Abnormal’s website says its software “detects hyper-personalized, never before seen attacks with no traditional indicators of compromise.”

Sublime’s Kamdjou said attacks still make it through the defenses of large email providers such as Google and Microsoft, even when companies pay extra for higher tiers of service.

“That’s why we’re seeing so much success, basically,” Kamdjou said. “We’re here to catch everything they don’t.”

Representatives from Abnormal, Material, Microsoft, Mimecast and Proofpoint did not immediately respond to requests for comment.

The challenge facing incumbents such as Mimecast and Proofpoint is less about losing customers and more about missing out on new business from young companies that go with a next-generation tool such as Abnormal, according to Mark Alley, an email security consultant in Alabama. But some companies have switched to Sublime from Mimecast and from Proofpoint, Kamdjou said.

Proofpoint appears to be aware of the challenge, having acquired AI startup Tessian last year. Sumit Dhawan, CEO of Proofpoint, said in October that the company was 12 to 18 months away from going public again. He said he saw interesting potential acquisition targets but that prices remained high.

Sublime lacks a billion-dollar valuation. Unlike many richly valued startups, it has not resorted to splashy marketing, and it’s not big on placing cold calls, either.

Kamdjou said the startup did reach out to Donald Trump’s 2024 presidential campaign but didn’t get anywhere. In August, the campaign said a foreign adversary had obtained documents after breaching its email system.

“We’re very fortunate, because the majority of folks have heard about us just from word of mouth,” Kamdjou said.

They can then get a sense of Sublime’s abilities by uploading emails to a free service called EML Analyzer, which will use AI to predict if messages are likely benign, suspicious or malicious. It can pick up on phrases that often show up in business-email compromise attempts.

The sales-light approach won’t be changing now that Sublime has more capital to work with.

“Our mindset is we’re going to go and spend a bunch of money on R&D still,” co-founder Ian Thiel said.

WATCH: Trump campaign says emails hacked: Here’s what to know

Technology

China’s DeepSeek quietly releases upgraded R1 AI model, ramping up competition with OpenAI

Published

2 hours ago

May 29, 2025

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China's DeepSeek quietly releases upgraded R1 AI model, ramping up competition with OpenAI

Deepseek’s logo on Jan. 29, 2025.

Andrey Rudakov | Bloomberg | Getty Images

Chinese startup DeepSeek, which caused shockwaves across markets this year, quietly released an upgraded version of its artificial intelligence reasoning model.

The company did not make an official announcement, but the upgrade of DeepSeek R1 was released on AI model repository Hugging Face.

DeepSeek rose to prominence this year after its free, open-source R1 reasoning model outperformed offerings from rivals including Meta and OpenAI. The low-cost and short time of development shocked global markets, sparking concerns that U.S. tech giants were overspending on infrastructure and wiping billions of dollars of value of major U.S. tech stocks like AI stalwart Nvidia. These companies have since broadly recovered.

Just as was the case with DeepSeek R1’s debut, the upgraded model was also released with little fanfare. It is a reasoning model, which means the AI can execute more complicated tasks through a step-by-step logical thought process.

The upgraded DeepSeek R1 model is just behind OpenAI’s o4-mini and o3 reasoning models on LiveCodeBench, a site that benchmarks models against different metrics.

DeepSeek has become the poster child of how Chinese artificial intelligence is still developing despite U.S. attempts to restrict the country’s access to chips and other technology. This month, Chinese technology giants Baidu and Tencent revealed how they were making their AI models more efficient to deal with U.S. semiconductor export curbs.

Nvidia CEO Huang on export controls: China market is home to 50% of the world's AI researchers

Jensen Huang, CEO of Nvidia, which designs the graphics processing units required to train huge AI models, slammed U.S. export controls on Wednesday.

“The U.S. has based its policy on the assumption that China cannot make AI chips,” Huang said. “That assumption was always questionable, and now it’s clearly wrong.”

“The question is not whether China will have AI,” Huang added. “It already does.”

Technology

Elon Musk thanks Trump, says he’s leaving government work with DOGE

Published

9 hours ago

May 29, 2025

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Elon Musk thanks Trump, says he's leaving government work with DOGE

Tesla CEO Elon Musk reacts while wearing a cap with the words “Gulf of America” as he attends a cabinet meeting held by U.S. President Donald Trump at the White House in Washington, D.C., U.S., April 30, 2025.

Evelyn Hockstein | Reuters

With his official stint in government coming to an end, Elon Musk thanked President Donald Trump on Wednesday for “the opportunity to reduce wasteful spending.”

Since joining the second Trump administration at the beginning of the term in January, Musk has led the Department of Government Efficiency, tasked with slashing the size of the federal government.

As a so-called special government employee, Musk can work for the administration for 130 days in a calendar year. The end of May marks 130 days since Trump’s inauguration.

“The @DOGE mission will only strengthen over time as it becomes a way of life throughout the government,” Musk wrote.

A White House official who was granted anonymity to describe personnel matters confirmed Musk’s departure and said he will begin offboarding Wednesday night.

Musk was critical of Trump’s spending bill that’s making its way through Congress, saying in a CBS interview set to air June 1 that it “undermines the work that the DOGE team is doing.”

Tesla investors demand Musk work 40-hour week at EV maker as ‘crisis’ builds

Published

12 hours ago

May 28, 2025

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Tesla investors demand Musk work 40-hour week at EV maker as 'crisis' builds

Elon Musk interviews on CNBC from the Tesla Headquarters in Texas.

CNBC

Elon Musk needs to spend more time at Tesla as his electric vehicle company faces a “crisis,” according to a letter on Wednesday from a group of pension fund leaders who manage investments in the company.

“Tesla’s stock price volatility, declining sales, as well as disconcerting reports regarding the company’s human rights practices, and a plummeting global reputation are cause for serious concern,” the investors wrote in a letter to Robyn Denholm, the company’s board chair. “Moreover, many issues are linked to Mr. Musk’s actions outside of his role as Technoking and Chief Executive Officer at Tesla, including his high-profile role as an architect of the U.S. Department of Government Efficiency (DOGE).”

The investors want the Tesla board to require Musk to work a minimum of 40 hours per week at the automaker as a condition of any new compensation plan they may arrange for him. They also want a clear succession plan for management of the EV business, and a policy that would apply to all Tesla directors limiting their outside board commitments at public and private companies.

Early last year, the Delaware Court of Chancery ordered Tesla to rescind Musk’s 2018 CEO pay package, which had been worth around $56 billion, finding that Musk controlled the company, and the board’s compensation committee misled shareholders before seeking their vote to approve the plan.

Musk now says he wants even more shares, amounting to 25% voting control of the company.

Tesla’s brand value and reputation have declined since 2024, due largely to Musk‘s incendiary rhetoric and political activities. In addition to pouring nearly $300 million into an effort to get Donald Trump back into the White House, Musk formally endorsed Germany’s far-right AfD party ahead of the country’s parliamentary election this year.

At DOGE, Musk has led an initiative by the Trump administration to slash federal agencies.

Tesla once ranked eighth among the most popular American brands in the Axios Harris Poll of public perceptions of the 100 most visible U.S. companies. But recently, Tesla dropped to 95th, behind six other automakers in that poll.

Tesla’s stock price is down 12% this year, while the Nasdaq is down just 1%.

Data this week revealed that Tesla’s monthly sales across Europe plunged by nearly half in April compared to the same time last year. That trend extends the steep declines Tesla saw in the first quarter.

The investors who signed Wednesday’s letter own about 7.9 million shares in the company combined. They blamed a Tesla board that’s “unwilling to act in the best interest of all Tesla shareholders” by requiring Musk’s “full-time attention” on the company.

Musk said this week that he plans to focus more on his businesses, which include xAI and SpaceX in addition to Tesla.

Those who signed the letter included the pro-labor SOC Investment Group, American Federation of Teachers, New York City Comptroller Brad Lander and Oregon State Treasurer Elizabeth Steiner.

The investors asked Tesla to add at least one new independent director with no personal ties to other board members. Tesla earlier this month said former Chipotle CFO Jack Hartung will join the company’s board. Hartung previously worked with Musk’s brother and Tesla board member Kimbal Musk, who was a board member at the Mexican food chain.

Tesla didn’t respond to a request for comment in response to the letter.

Read the investors’ letter in full here.

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